Beyond the Economics of EU membership

Referendum Briefing Paper no. 4

Guy Brandon, April 2016

Euro_coins_and_banknotes(From a talk given at the University of Winchester on 9th April)

This paper looks at some of the biblical principles that might underpin our political-economic vision of the EU.

We look at this issue of EU membership in predominantly economic terms. It’s a cost-benefit analysis of the financial implications with regard to jobs, taxes, the effects of bureaucracy, potential welfare expenses, and so on. Even when we’re talking about an issue as emotive as migration, we talk about identity and culture, but we still focus mainly on the economic dimension.

Now, of course it’s highly contentious to discuss our EU membership from a narrowly economic perspective – the different sides argue it both ways and, you can never know for sure what the effect of leaving will be unless you do. But it also begs a question: whether the economic realm is really the framework within which we should explore this. Or rather, we make assumptions about the nature of that framework. Money is the ends, in this debate, not the means to a different and hopefully higher end.

When you remember that the EU was founded on an essentially Christian vision of peace – yes, largely through economic relationships, but with those relationships as the means – then you start to appreciate the problem. And it’s not as simple as grasping that the cost is not the same as the value. It’s that when you absolutise economic prosperity, which I think it’s fair to say we have done, you inevitably miss the wood for the trees.

So I want to pull a few broad principles out of the Bible with the aim of informing the framework within which to explore our economic vision of the EU.

Money

Firstly, money in the Bible is not absolutised. There’s a lot about money in the Bible, but it’s never about GDP or the bottom line. Money is supposed to function as a kind of social glue. It’s used to strengthen relationships, or at the very least the legislation around it minimises the harms and risks inherent in certain transactions. That’s not just on a personal level, which is another difference in the way we typically view money. It has implications for individuals but it’s also viewed in terms of the impacts on families and whole communities. There’s recognition that we live together and the decisions we take have collective impacts. Money is used for mutual benefit. There’s solidarity. An implication of this is that if you do absolutise money, injustice results. Almost by definition, because you’re prioritising the wrong thing and all else is of secondary importance.

Freedom of movement

One example of this in the context of the EU is freedom of movement. Citizens of the EU have freedom of movement within the EU to allow them to access work; they can go wherever the jobs are with essentially no restrictions. The Bible flips that around and says, you can move wherever you want, no restrictions, but the economy and finance system is structured in such a way that wherever possible, you won’t have to. The reason for that is spelled out explicitly in Leviticus 25, which sets out some of the major economic safeguards that were supposed to apply to Israel. If one of your countrymen becomes poor and is unable to support himself, help him, treat him as a hired worker, don’t charge him money at interest, ‘so that he may continue to live among you.’ There’s an acknowledgment that poverty undermines families and communities, it breaks them up because people have to move away to find work. Family, extended family, is important, because so much support and care happens within it. Something coming down the track for Europe is what happens when the Baby Boom generation starts needing more care in their retirement and the family members who might previously have done that have moved abroad for work. The costs associated with that care will have to be pushed somewhere else.

So there’s a clear economic vision there in the Bible: the economy serves family and community relationships, rather than our de facto ‘vision’, which tends to prioritise short-term economic growth and leaves families and communities as collateral damage. That also has long-term costs we haven’t begun to grapple with yet.

Mutual wellbeing

That economic vision is also reflected in the reset mechanisms that prevented the accumulation of wealth by the rich at the expense of the vulnerable. For example, the Bible’s zero interest policy, Sabbatical debt cancellation, and the Jubilee Year, where ancestral land was returned to its original owners every 50 years. Whatever you think about the direct applicability or otherwise of those principles in a modern economy, there’s a clear underlying principle that inequality and particularly the loss of economic independence that is a by-product of inequality are to be avoided wherever possible. We have lost sight of our mutual wellbeing in favour of individual wellbeing – and again, that ‘wellbeing’ tends to be seen in narrowly economic terms.

Something for nothing

Another related principle that underlines that is that you don’t get something for nothing (financially speaking). There should always be a relationship and a sharing of risk between the parties to a transaction. That’s seen in the ban on interest. We see interest as rent on the use of money; the Bible sees it as a form of injustice: a way of extracting value from a vulnerable party to a strong one. Debt is a last-ditch resort. There are implications to debt, power differentials. Proverbs says ‘The borrower is slave to the lender.’ Just think of Greece and Germany. That’s not to say you never borrow, only that it’s never something you do lightly. And you structure a loan in such a way that the relationship is as equal as possible under the circumstances. It’s not an extraction of value. It’s designed to enable the borrower to maintain their freedom.

Centralisation of power

One last principle it’s worth bringing out is subsidiarity, or the idea of appropriate decentralisation. Subsidiarity is enshrined in EU law, though its application isn’t particularly convincing in practice; interference from Brussels is one of the reasons a lot of small businesses want out of Europe. It’s reflected in the biblical scepticism around concentrated power, whether that’s political power, or financial or any other kind of power. There’s a sense that power corrupts, and absolute power corrupts absolutely. The more financial and political power is concentrated within a given body, the greater the scope and the tendency towards abuse of one kind or another.

So if you put these pieces together, what kind of picture do you get?

  • One in which the benefits of membership – or non-membership, if we go that way – are proportional to the investment and risk involved in that membership. Which I think is what people have really been saying all along about the EU, on both sides, it’s just that they just differ on their interpretation of the data.
  • It also means that the implications of the level of integration entailed in any future iteration of the EU must be reflected across the interests of all stakeholders. One thing we’ve learned is that monetary union without fiscal and political union is a relational and economic train wreck. Whether and how you would possibly go about greater fiscal union – and whether that would be enough to fix the problem – are other questions. The point is that as things stand the Eurozone is half-cooked and there are some serious issues with that.
  • One in which GDP isn’t absolutised: money and trade serve a greater purpose of community cohesion and integration. That is a discussion we’ve barely started yet. What it entails is taking a longer-term view and starting to factor in some of the externalities we’re going to face. Chief among those is the pensions are care bill but I think you could also look at the cost of unemployment as a result of the financial crisis and recession – which was led by the risky lending practices of the banks.
  • As a related point, that situation is going to be hard to change due to resistance from the finance sector, which is powerful enough to push back pretty hard. It’s a good example of how the concentration of financial and political power has a tendency to work against those it’s supposed to serve. In biblical terms, too big to fail means too powerful to exist.
  • Ultimately, what is lacking is a workable and attractive vision for the EU. We had one at the beginning but we lost it. Now we need a new one, fit for purpose for what the EU has become in the 21st At the moment, the vision is for an ‘ever-closer union among the peoples of Europe’. I’d argue that ‘better relationship’ was a more nuanced and biblically-sound goal.
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Category: Reports and Articles

April, 2016

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